08/13/2012 04:51 EDT | Updated 10/13/2012 05:12 EDT

Cascades to close Toronto napkin plant, 30 employees affected by move

TORONTO - Cascades Inc. (TSX:CAS) is permanently closing its paper napkin plant in Toronto, a shut down that will affect about 30 employees.

The company said Monday production from the McNicoll Street factory will be redirected to its plants in Laval, Que., and Waterford, N.Y.

"In line with our restructuring actions to increase our operations' efficiency, this decision was taken to secure our position as leader in the away-from-home tissue paper sector," said Suzanne Blanchet, president and chief executive of Cascades Tissue Group.

"This initiative will enable us to maximize the production at Laval and Waterford plants, while continuing to offer a first-class product and service to our customers."

The move does not affect its Milliken Street plant, also located in Toronto.

Cascades has been restructuring to focus on its core tissue and packaging businesses.

Last week, the company reported a second-quarter profit of $7 million or eight cents per share, compared with $122 million or $1.27 per share a year ago when the company sold its Dopaco paper cup and food carton business.

Excluding one-time items, adjusted net earnings were $7 million or eight cents per share, compared to a loss of $9 million or nine cents per share in the prior year.

Cascades attributed the improved profitability to higher volumes, lower energy costs and a weaker Canadian dollar.

Quarterly revenues decreased 4.7 per cent to $944 million, compared with $991 million for the same period in 2011.

Cascades has made numerous changes in recent months, including the consolidation of its corrugated products sector in Ontario, equipment upgrades this summer in Europe and Greenpac machine installation set for next year.

The company produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres and has more than 12,000 employees working in North America and Europe.